Confidential
Investor Presentation Fiscal Year 2012 March 2013
Depa Limited Dubai, UAE
Disclaimer
This material contains certain statements that are “forward-looking” forward looking including management’s expectations and analysis. These statements are based on management’s current expectations and are naturally subject to uncertainty and g in circumstances. Actual results mayy varyy materiallyy from the expectations p changes contained herein and readers and listeners are cautioned not to place undue reliance on any forward-looking comments. Depa Ltd undertakes no obligation to update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise.
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Contents
Overview Backlog Corporate Restructuring and Governance Financials Shareholder Structure Outlook
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Overview
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FY 2012 Overview Revenue growth despite challenges faced illustrating Depa’s resilience and operational strength Revenue
Revenue (AED Million) 2007
• •
On a global level, 2012 was a difficult year across sectors & geographies Despite facing challenges of merging/divesting business units, closing underperforming projects and encashment of performance bonds, revenues grew 12.1% over 2011 to reach AED 1,947 million in 2012
1,420
2008
1,972 2,689
2009 2010
1,814 1,736 1,736
2011
1,947
2012
Net Profit
Net Profit [after minority interest] (AED Million) 2007
• • •
Net loss after minority interest was AED 120 million in 2012 Results were significantly impacted by the New Doha International Airport (NDIA) performance bond and advance payment guarantee encashment Provisions of AED 125.5 million recorded in 2012 (mainly for NDIA in Qatar and Port Baku & JW Marriot in Azerbaijan) also impacted net profit margin
160
2008
194 234
2009 2010 2011
(198) 54
2012
Backlog
Backlog (AED Billion) 2007
• • •
Year-end backlog of AED 2.75 billion comprises projects with very low-risk profiles Preference to operate a smaller secure backlog with less risk and higher payment guarantees; turned down opportunities incorporating high risk levels Backlog remains diversified across sectors and geographies - hospitality, infrastructure and residential contribute majority (90% of backlog) while Saudi Arabia tops the list with three large contracts (Shamiyah Expansion, KAPSARC and KSU)
(120)
1.62
2008 2009 2010
2.70 2.09 2.18
2011 2012
2.87* 2.75
*Backlog for 2011 has been adjusted for ex-NDIA
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FY 2012 Overview Over AED 460 million worth of projects signed in Saudi Arabia during 2012 Cash Generation (AED Million)
Balance Sheet/Cash Generation
• •
Depa’s balance sheet remains strong with total assets of AED 3.14 billion as of 31 December 2012 (31 Dec 2011: AED 3.03 billion) and cash and bank balances of AED 307 million (31 Dec 2011: AED 332 million) Negative cash generation in FY 2012 was AED -25 25 million
47
100
174 38 ‐25
‐43
FY07
FY08
FY09
FY10
FY11
FY12
Growth Markets
• •
Saudi Arabia and Abu Dhabi are potential growth catalysts for the backlog in the near-term. Saudi Arabia now contributes 33% of backlog; AED 461.8 million worth of projects signed in 2012 O Opportunities t iti in i under-developed d d l d areas, such h as Af Africa i and d th the CIS countries ti are coming on-stream l
Completed Projects
• • • •
PPM Conrad Hotel W Hotel Fairmont Palm Hotel & Resort Capital Centro Hotel
• • • •
Port Baku IPIC Headquarters Grand Hyatt Malaysia Topaz Germany 6
Backlog g
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Backlog Backlog diversification has increased, with 20% infrastructure value growth
•
Depa continues to have healthy contracted b kl backlog which hi h stood t d att almost l t AED 2.75 2 75 billion.
•
Backlog consists off 228 projects
•
Key projects (where over AED 10 million of work is remaining) represent 88% of our backlog value and are worth AED 2.44 billion.
•
International composition of these projects, with very little exposure to Dubai, illustrates the preferred payment methods and financial benefits of operating an international project as opposed to a local one
* Singapore Projects Above 10 Million (18 Projects) Projects Over 50 Million (2 Projects) Projects 30‐50 Million (2 Projects)
Projects 15‐ 30 Million (6 Projects ) Projects 10 ‐ 15 Million (8 Projects)
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Backlog: Geographical Distribution Most notable backlog growth in Saudi Arabia, with regional growth prospects also strong
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Backlog: Sector Distribution Infrastructure portion increased most significantly due to the Shamiyah Expansion project
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Backlog & Revenue Backlog level provides ample opportunity for growth in 2013
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Corporate Restructuring g and Governance
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Consolidation and Restructuring Corporate restructuring began early last year is now nearing completion
Corporate Restructuring Exercise
Corporate Restructuring Results
Merging/divesting business units
Operationally, O ti ll contractually t t ll and d structurally t t ll stronger
Closing/reorganizing under-performing projects
Increasingly flexible when pursuing global projects Boosting accuracy when bidding for development and production of projects
Streamlining the Company further by reducing g costs, minimizing g identified risk exposure and improving quality of finished work
C t li i estimation, Centralizing ti ti engineering i i and d design development functions for specific geographic areas Investing in and improving engineering d department’s t t’ technology; t h l th thus, iincreasing i portion of completed work in factories and reducing on-site requirements
Overall risk profile reduction; implementation off new risk i k committees itt reduces d risk i k associated with entering new countries and signing large projects Centralizing key functions saves time and cost as well as minimizes errors Hired a Chief Manufacturing Officer to examine and recommend methods to streamline the manufacturing units further and extract more synergies Restructuring efforts (amongst others) increased revenues per employee by about 8.5% during FY 2012
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Corporate Governance Articles of Association and governance updated to ensure highest levels of compliance
•
Updated Articles of Association to reflect the revised Companies’ law and to ensure highest levels of compliance
•
Board of Directors: Independent board member Helal Saeed Almarri resigned in Q1 2013 to attend to his new role within the Ministry of Tourism and Ahmad Ramadan was nominated as a new board member
•
Updated governance to ensure DFSA’s new rules and regulations are fully implemented
•
Adopted best practice standards of Corporate Governance set out in Markets Rules of DFSA
•
Enhanced level of risk management g to better assess strategic, g financial, operational, p compliance and legal risks
•
Reviewed Corporate Governance and Operating manuals in 2011, in line with international best p practice on corporate p governance and in collaboration with KPMG g
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Financials
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Financials: Overview
AED Million Revenue
FY 2011
FY 2010
1,947
1,736
1,814
Ratio Analysis Quick Ratio
158
288
114
Dec-12
8%
17%
6%
Dec-11
(191)
(163)
(179)
Dec-10
10%
9%
10%
Provision for Doubtful Debts
(126)
(4)
(100)
Amortization of Intangibles
(30)
(44)
(26)
12
(2)
36
Contract Profit Margin
General & Admin Expenses % of Revenue
Profit / (Loss) from Associates Gain on Acquisition of Investment
18
Current Ratio
1.42
Dec-12
1.51 1.58
1.50
Dec-11
Dec-12
1.58
Dec-10
Debt to Equity Ratio 0.19
Dec-11
1.65
0.15
Dec-10
0.19
Receivables Aging 250 AED (millions)
Contract Profit
FY 2012
200 150 236
100 50
128
102 45
0
p ) - Net Other Income / ((Expense)
24
Impairment loss
(12)
Finance Income / (Cost) - Net
(9)
13
(41) (13)
0 - 89 Days
25
90 - 180 Days
(10)
(16)
(49)
Net Profit / (Loss) before NCI
(184)
59
(206)
223 198
183
90
89
Net Profit / (Loss) Margin before NCI
Net Profit / (Loss) after NCI Net Profit / (Loss) Margin after NCI
-9%
3%
-11%
(120)
54
(198)
-6%
3%
-11%
361 Days & Above
Days Receivable and Payable
(4)
Income Tax
181 - 360 Days
59
50 Dec-10
94 38
Dec-11
AR Days - including unbilled revenues
Dec-12 AR Days - excluding unbilled revenues
AP Days
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Financials: Selected Balance Sheet Figures
AED Million
Dec-12
Dec-11
Dec-10
Cash in Hand
307
332
450
Trade Receivables
511
432
450
Unbilled Revenue
562
642
474
Total Current Assets
2,056
1,825
1,801
Total Assets
3,144
3,030
3,037
299
262
331
Total Current Liabilities
1,375
1,155
1,091
T t l Liabilities Total Li biliti
1 531 1,531
1 286 1,286
1 327 1,327
Total Equity
1,613
1,744
1,710
Working Capital
681
670
710
CAPEX
47
71
24
Total Bank Debt (Short & Long Term)
KPIs
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Financials: Selected Cash Flow Figures
AED Million
FY 2012
FY 2011
FY 2010
Net Cash (used in) / generated from Operating Activities
(25)
38
174
Net Cash (used in) / generated from Investing Activities
(34)
(53)
(206)
Net Cash (used in) / generated from Financing Activities
36
(70)
(10)
Net (decrease) / increase in cash and cash equivalents
(23)
(85)
(42)
Total Cash Balance*
307
332
450
Total Bank Debt
(299)
(262)
(331)
Total Net Cash
8
70
119
* Cash balance includes FDs with a tenor of 3 months or more amounting to:
32
34
66
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Financials: Geographic Segmentation
Revenue
AED Million Variance
Regional Office
FY 2012
FY 2011 Amount
Percentage
Dubai
621
599
22
4%
Abu Dhabi
416
340
76
22%
Asia
499
440
59
13%
Europe
411
357
54
15%
1 947 1,947
1 736 1,736
211
12%
Total
FY 2012
FY 2011
21%
21%
32%
34%
26%
25% 21%
D b i Dubai
Ab Dh bi Abu Dhabi
20%
Ai Asia
E Europe
Dubai
Abu Dhabi
Asia
Europe
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Financials: Activity Segmentation
Revenue
AED Million Variance
Activity Segment
FY 2012
Contracting
FY 2011 Amount
Percentage
1,299
1,208
91
8%
Manufacturing
616
504
112
22%
Procurement
32
24
8
33%
1,947
1,736
211
12%
Total
FYÂ 2012
FYÂ 2011
2%
1%
29%
31% 67%
Contracting
Manufacturing
70%
Procurement
Contracting
Manufacturing f
Procurement
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Shareholder Structure
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Shareholder Structure: Region & Investor Type Breakdown Institutional investors form the majority of shareholders
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Outlook
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Outlook
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Saudi Arabia announced over $65 billion of new construction projects last year; we anticipate p to expand p our p presence in this market over the coming g y years as it provides p opportunities for further growth
•
We are also witnessing upcoming opportunities in under-developed areas, such as Africa and the CIS countries,, where new high-quality g q y developments p are coming g on-stream. We believe that many of the opportunities for the Company in the near to medium term lie in such projects outside our home markets
•
We expect p our sector diversification to remain consistent,, with some p potential g growth in the infrastructure segment as we pursue an increased amount of work in several hospitals, airports and other government-backed projects in the region and beyond
•
We continue to roll out centralization in other geographic regions over the next 12 to 18 months and foresee further improvement in the Company’s operations
•
We expect to reap benefits of the corporate restructuring, such as decreased labor and site costs, costs over the next few years
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